Jonesboro Finance Committee approves FMH bond request

Committee chairman Darrel Dover said a payment in lieu of taxes, or PILOT, program for a company that will build a 200,000-square-foot facility will bring much needed jobs to the region and is a plus for Jonesboro.

The Jonesboro City Council Finance Committee voted by voice vote Tuesday (May 31) to approve a $14 million, 15-year bond issue for FMH Conveyors. The company, which makes conveyors for unloading and loading trucks, announced plans March 23 to build a facility at the corner of Barnhill Road and Highland Drive in the city industrial park. The company plans to hire 110 people and have the facility completed by November 1, company officials said earlier this month.

Under the proposed agreement, FMH agrees to follow certain criteria during the life of the agreement. Instead of paying ad valorum, or property taxes, FMH Conveyors “will pay to the City an annual sum equal to 35% of the amount which would be payable as ad valorem taxes that would have to be paid on the Project to the State of Arkansas, Craighead County, the Nettleton School District, and/or other political subdivisions. Under the agreement, the payments are due no later than October 10 each year after construction is done while payments not paid by October 10 “shall bear interest at 5% per annum until paid.”

The agreement also notes that the payment covers specific items as part of the expansion.

“The payment is based on the land, buildings, improvements and equipment comprising the Leased Premises, excluding licensed vehicles. Any expansion or improvement of the Project will become subject to this Agreement using the same formula for the term of the Bonds,” the agreement noted.

Michelle Allgood, an attorney with the Jonesboro-based law firm, Mitchell Williams, said the bonds will be privately placed, or sold, to affiliates of FMH starting June 21. As for the 35% payment, Allgood said it will be divided on a pro rata basis with the Nettleton School District likely to receive the lion’s share of the funding. Most, if not all of the Jonesboro Industrial Park, lies within the Nettleton School District. Once the bonds are placed, the agreement will go back to the Jonesboro City Council for their approval.